NIC secures Sh7bn for growth and legal needs

NIC Bank branch. A Nairobi court has allowed police to continue holding two men accused of hacking into a bank’s computer database until investigations are completed. FILE PHOTO |

By  JOSHUA MASINDE

What you need to know:

  • NIC Bank also got a Sh4.9 billion loan ($55 million) from the International Finance Corporation (IFC) for long-term lending to customers across East Africa.
  • The second loan of Sh1.8 ($20 million) will be used to boost the bank’s capital in compliance with Central Bank of Kenya’s prudential guidelines on capital adequacy ratios.

NIC Bank is set to receive Sh7 billion from shareholders and lenders in its quest for more capital for expansion and to meet regulatory requirements.

The bank’s owners increased their share capital by Sh2.1 billion through a rights issue that was 121 per cent oversubscribed, highlighting growing interest.

Shareholders offered Sh4.6 billion to the institution in a cash call that sought to raise Sh2.1 billion to boost its capital and lending capacity.

Also Read

NIC Bank also got a Sh4.9 billion loan ($55 million) from the International Finance Corporation (IFC) for long-term lending to customers across East Africa.

The first of the loans signed this week, will see IFC advance Sh3.1 billion ($35 million) to the listed firm for onward lending to personal as well as small and medium enterprise (SME) clients.

THIRD RIGHTS ISSUE

The second loan of Sh1.8 ($20 million) will be used to boost the bank’s capital in compliance with Central Bank of Kenya’s prudential guidelines on capital adequacy ratios.

“The loans will enable us to grow our loan book aggressively, including financing projects with high foreign currency funding requirements,” NIC Bank Group Managing Director John Gachora said. 

The bank had offered a total of 42,663,040 new shares at a discounted price of Sh49.25 apiece on the basis of one new share for every 14 ordinary shares held.

Listing of the new shares will take place on December 18. This was the bank’s third rights issue in seven years having raised Sh1.1 billion in 2007 and Sh2.1 billion in 2012.

“Our focus going forward will be to penetrate the retail and SME markets as well as increase our footprint in the region,” Mr Gachora said after the announcement of the rights issue results.

In the headlines